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No Way Out of Brexit, But One Way Forward

(Bloomberg Opinion) -- Theresa May’s cabinet has been bitterly divided for months over what kind of future ties it wants with the European Union. If there’s white smoke on Friday after her cabinet gathers at the prime minister’s country residence at Chequers, it means she’s ended the divisions. For now.

It’s always unwise to count her out. But even if she gets agreement — in the form of the long-awaited white paper setting out the U.K.’s position on future EU relations — that is only one of many hurdles to clear before the clock runs out and Britain leaves Europe without a deal at all.

Whatever happens Friday, there’s no getting around the fact that the one thing Britain needs — and Europe too if it wants to avoid a British exit without a deal — is more time.

Like or loathe Brexit, Theresa May has made one fatal mistake in how she played her hand so far: She started the two-year Brexit clock ticking far too early by triggering Article 50 of the EU’s Lisbon Treaty before her government had the foggiest idea what it really wanted out of the negotiations. Much of the confusion and chaos that has followed is a result of that hasty decision.

The government’s own Article 50 notice letter — a confounding six pages of posturing and positioning — was itself suggestive of muddled thinking. (Were they really betting the clumsy threat of reduced cooperation on counterterrorism would nudge the EU toward agreement?)

When Article 50 was drafted, not a great deal of thought went into how long it might take to negotiate an exit from the EU. Two years might be possible if the exiting member knew what it wanted; Britain doesn’t. Getting a consensus in the cabinet — deeply divided over the kind of customs agreement it wants, among other things — is hard. Getting to a deal with the EU is another leap; getting there by October, the EU’s deadline, or even December (last chance saloon) almost defies gravity.

Even under a wildly optimistic scenario — an end to cabinet divisions over Brexit and a full withdrawal agreement reached by October — Parliament would have very little time to scrutinize the bill. Then there is the question of approval from the European Parliament and a qualified majority of EU member states (at least 20) in the European Council.

But what if the timetable could be stretched out a little? Article 50 explicitly gives the European Council the power to decide to extend the two-year process. The common assumption was that the member state had to ask first. And yet there’s no reason that the EU couldn’t offer an extension to May unsolicited.

Both sides would get something out of it. The EU could argue that its interests are also harmed by the prospect of Britain exiting without a deal covering trade, fisheries, citizens’ rights, the Irish border and other issues. There is no question that Britain would bear the bigger burden, but the stakes are high for manufacturers, consumers and financial-sector actors in Europe too. An extension would give Britain more time to work out its positions. The EU might also view a longer Article 50 process, so obviously painful for the U.K. both politically and economically, as a deterrent to other EU members who are having similar thoughts.

Of course, Brexit supporters would fear this is a sneaky way of making sure Brexit doesn’t happen at all. There is already much talk, including in Parliament itself, of extending the transition period, which Brexiters oppose. But May could argue that even if it took a little longer, it would likely mean a better deal and a briefer transition. And while her previous mantra was “no deal is better than a bad deal,” she now has reason to warn that “no deal” might jeopardize Brexit itself; it’s not clear how parliament will respond if there is no deal or a deal they cannot approve. But all bets are off if that happens.

Any request would have to be approved by all 27 other EU members. They may have had enough of the U.K. and the Brexit process and wish to keep the U.K. under pressure. And some will oppose the idea of Britain still being in the European Parliament after the May 2019 elections. But the idea has gained some traction; refusing an extension would be a dangerous gambit that would hurt future ties.

An outright extension may not be the only way the Article 50 clock can be stopped. The U.K. parliament could reject a withdrawal agreement, which might trigger a vote of no confidence in the government or a negotiation on what happens next. That could prompt the EU to suspend the clock until Parliament has made a decision to accept no deal or the government has agreed to resume negotiations. If the European Court of Justice were asked to rule on the new withdrawal agreement, the Article 50 clock would also presumably be stopped. But none of those outcomes would be remotely attractive to Brexiters who just want to ensure that the leaving takes place.

May has survived this long largely because she has managed to fudge the big issues dividing her own party. If getting a consensus now is too high a hurdle, she can at least try to play for more time.